Robert Simpson's Stock Purchase Story
The story about Robert Simpson comes up from the 10-minute mark.
A man named Robert Simpson in Michigan wondered what would happen if someone suddenly bought all the floating shares, so among OTC stocks with small market caps, he bought all the shares of Global Links. (1,285,050 shares) He then confirmed the purchase in his brokerage account and confirmed that the shares had been deposited, and was holding them.
Even though he held 100% of all shares, 37,044,500 shares were traded the next day, and 22,471,000 shares were traded the day after that. It later became a controversy, leading to an SEC hearing and a big uproar. What's even more surprising is that Global Links had originally issued only 1,158,064 shares, and Simpson held an additional 126,986 that did not exist.
The hearing was held in March 2005, and it became even more controversial that Overstock.com and other stocks had also been shorted in a similar manner. Around that time, the subprime crisis broke out, so to prevent indiscriminate short selling, fail-to-deliver rules were strengthened, requiring immediate settlement whenever a failure to deliver occurred. That is "Fails-To-Deliver", hereinafter FTD.
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